What Is Locking A Rate Mean

What is “locking a rate” and how does one lock in a rate.

Locking a rate means (in most cases) you’ve got a property address and a closing date and your lender has locked in/protected the rate based on the current market. Your mortgage interest rate has been set or fixed. If rates rise after you lock in it does not affect you…your rate is “protected”. Most lenders require a few things before locking in:

1. Your application including social security number

2. A close date

3. A property address

Most locks are 30 to 45 day locks meaning the rate is “protected” for that period of time. However most banks offer locks as long as 180 days. Typically the longer the lock the higher the rate.

Locking In A Mortgage Rate

To lock in a rate you want to call your lender directly, review the current market rate and if you’re done shopping tell your lender to lock it in!

What happens if rates drop after you lock in? Banks will work with you and some banks offer “free” float downs (1 time) if rates drop substantially. The bank doesn’t want to lose you as a customer so they will offer some form of rebate IF the market has dropped substantially.

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Max A Kallos 404-277-5884 cell 678-298-8947 e-fax

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